UK mortgage approvals hit two-year high, says BBA

The number of mortgages approved for house purchase rose to its highest level
for nearly two years during October, according to the British Bankers'
Association.

Around 42,238 loans were approved for people buying a property during the month, nearly double the number seen in October last year - the height of the financial crisis.

10:08AM GMT 24 Nov 2009

Around 42,238 loans were approved for people buying a property during the month, nearly double the number seen in October last year - the height of the financial crisis - and the highest level since January 2008.

Net lending, which strips out redemptions and repayments, also held firm at £3.1bn, the BBA said.

However, unsecured lending remained subdued as consumers instead focused on paying down their debts and building up savings.

David Dooks, BBA statistics director, said: "The longer it takes to emerge from recession, the longer we will see households and businesses continue to borrow with caution. The banks' mortgage lending, still growing by more than 4pc a year, shows one aspect of consumer behaviour but unsecured borrowing is subdued and people are building up deposits.

"A mixture of lower business demand, alternative corporate funding and tighter lending conditions, all giving rise to the on-going contraction in lending to non-financial companies, is a reflection of current market conditions."